In order to get your opportunity into an online action you must find a ‘Sponsor’ that will be prepared to put their reputation on the line for you and your proposition. These are experienced traditional bank managers and corporate finance advisors who provide a quality check and gateway to make sure that a high quality standard is maintained and that Lenders get all the information they will need to assess the opportunity business before making a bid to lend.

To be considered Borrowers must;

• Be a limited company based in the UK.
• Have been established for several years with a good credit history.
• Have a viable plan which demonstrates ability to repay the loan and interest in regular monthly instalments and be able to provide acceptable security that reduces the risks for Lenders.
• Have at least 3 years accounts that demonstrate financial stability and at least 1 year’s projections (Profit and Loss, Balance Sheet and Cash Flow Forecast)
• Be seeking to borrow between £30,000 and £3m.

There are a number of key stages in securing a loan through the Business Loan Network:

• Potential Borrowers (“Applicants”) are not allowed to put their opportunity on the BLN website directly. They must find a Sponsor prepared to support their case. Applicants register on the Thincats website [free of charge] and provide some brief information that will enable a Sponsor to decide if the business fits any particular regional or industry specialism and risk criteria that they might have.
• The Applicant reviews the information provided about Sponsors and selects up to [three] they would be interested in working with. A message is sent to those Sponsors seeking a meeting, those Sponsors read the information provided and follow up with a meeting if they are interested.
• The Sponsors will discuss the proposition with the borrower and make a decision as to whether they are prepared to support the application. The Sponsor and Applicant will agree a fee that will be paid only on successful completion of the loan. If the Applicant attracts more than one offer from Sponsors they can select the one that they prefer (based on track record, the service offered and fee structure). It is possible that some additional work will be needed to get the proposition ready and if so this will need to be paid for in advance.
• The selected Sponsor will work intensively with the Applicant to understand their business and because of this commitment the Applicant may not change Sponsor once this work has begun. The sponsor will complete an information pack for lenders including an assessment of the market, the borrower’s track record, strength of management, the purpose of the loan, what security is on offer and the businesses ability to make the proposed repayments. The objective will be to try and attract sufficient bids at auction to receive a loan offer at the most advantageous rate. The Applicant will be responsible for disclosing all appropriate information to enable an assessment of the risk to be made and providing detailed warranties to the lenders that the information provided is correct.
• When the Sponsor is satisfied the Applicant pays BLN a listing fee of [£250], the information is lodged on the website together with full details of the proposed deal including the amount required, the length of the loan and security offered but NOT the interest rate. The auction then begins; Lenders are notified that a new deal is available and may review the information provided and ask any questions they may have for the Sponsor or the Applicant using the Thincats.com messaging service.
• The auction will normally last between 1 and 2 weeks and Lenders will be able to offer all or part of the funding required, ranging from a minimum of 1% or £1,000 (whichever is lower) to the whole of the loan. 7. Each Lender will decide on the amount that they wish to bid and also the interest rate at which they are prepared to lend. They will then lodge their bid on the Thincats.com website. They make multiple bids at different rates but they cannot retract winning bids. If their bid is not low enough to be included in the final syndicate they are warned and allowed to resubmit a lower bid if they wish.
• When the auction closes, and assuming the bids made exceed the amount being raised, The Thincats software will assemble a lending syndicate from the bids starting with those that offered the lowest interest rate. Each bidder gets the rate that they bid but the Applicant gets offered the average rate plus a ‘margin’ of 1.5% of which 1% pays the costs of running the Business Loan Network and 0.5% is paid to the Sponsor to ensure that they have an ongoing interest in the success of the business.
• The Applicant then has to decide if the offer is acceptable. If the Applicant wishes to accept the offer BLN will also complete the standard loan agreement and gain electronic signatures from the Syndicate of Lenders. Although the money is coming from a syndicate of Lenders the Borrower receives the capital as a single payment and makes a single repayment each month. BLN has a system to enable the syndicate to make quick decisions and act as one.
• The Sponsor will work with the borrower to prepare and complete any security required under the loan and pass this to the Business Loan Network for holding or lodging as appropriate. It is the intention that all documentation and security is completed within an agreed (short) timescale and at no extra cost to the Borrower except for the costs associated with security or non standard legal work.
• BLN operates a system for allocating repayments to members of each syndicate and keeping a close watch on late repayments. Borrowers will be expected to keep in touch with their Sponsor and provide regular reports and information. This will require a strong financial function in the business. By reporting to the Sponsor you avoid having to give detailed financial information to the members of your lending syndicate because the Sponsor can then send a simple report (perhaps in the form of red, amber or green traffic lights to let the lenders know that everything is under control).